The UK Government's reluctance to commit to the euro could handicap UK firms participating in pan-European electronic trading exchanges.
So say half of a recent sample of 400 key executives quizzed by the Cranfield School of Management and Mori on the progress and future of business-to-business e-business initiatives in the UK.
With European firms reporting euro-conversion costs of £2m on average and some paying up to £20m according to a survey by PA Consulting earlier this year, getting the euro right is vital.
The fact that political opinion on the euro is divided reflects the delicate balance of the wider debate outside the IT industry on the pros and cons of entering a single currency.
"It makes sense, doesn't it? UK businesses need to have true price transparency to trade on an even footing," said Kitty Usher, chief economist at pressure group, Britain in Europe. "As exchange rates fluctuate and UK companies are occupied with hedging contracts - they will be competing from a disadvantaged starting point.
"This is particularly relevant when doing e-business with firms on the continent. E-business will open up the market, which means competition will increase. This in turn, will reduce margins. UK firms, bound by bureaucracy will see profits drastically affected," she added.
"While still in their infancy at the moment, pan-European e-marketplaces will be really large markets. UK firms have an opportunity to be in from the start, driving and shaping their development. By staying outside the euro, they will be held back."
The antithesis to this argument is provided by representatives from Business for Sterling which has recently produced a booklet entitled: How the Internet is leaving the euro behind.
"Britain can best foster the New Economy by staying out of the euro," said George Eustice, regional campaign manager at Business for Sterling.
"Far from being a modern project, the idea of the euro was conceived 30 years ago - the arguments about currency exchanges and hedging contracts fade away when you look at the advantages brought by the Internet," he said.
"Real-time currency converters and intelligent agents negate the competitive pressure of price transparency. Electronic transactions have a far lower cost than paper transactions. The Internet drives down the cost even of electronic transactions, reducing the costs of converting currency."
Eustice argued that the preoccupation with the euro distracts many from seeing the Internet as a driver towards the globalisation of trade where the euro will be one of several dominant currencies, such as the dollar and the yen.
"In such an environment, traders will choose to transact in whatever currency is most appropriate," said Eustice. "The dollar is likely to dominate but other highly credible currencies, such as sterling, will also have a place. The cost of time spent converting to the euro would involve an enormous diversion away from e-business, putting Britain at a competitive disadvantage to the US and other countries that are forging ahead with the new economy".
Alexandar Drobik, vice-president for business management research at analyst firm Gartner, said that while euro compliancy may aid UK firms to do e-business with their European counterparts, "it won't change the world".
"Many firms are already doing business with other currencies," Drobik said. "What will affect UK e-trade more is the volatility of the UK economy. Price stability is more important than price transparency. Some companies make more money from hedging than from the mother business."
At IBM, John Down, euro customer programme leader said that while UK firms will have to be ready to deal with the euro as a dominant currency, this does not necessarily mean that exclusion from the single currency will put them at a disadvantage.
"All marketplaces have a predominant currency," said Down. "If one wants to participate in that market they simply convert to that currency and then revert back to the local currency when the transaction is completed.
"For example, to play in the oil markets, you have to pay in US dollars - the convention has always been the same. In the instance of European e-marketplaces, there will be 12 countries, for which this is not an issue, the rest will simply have to take steps to protect against exchange rates changes," he said.
Laurent Lachal, senior analyst at Ovum takes a much more pro-single currency stance. "Players in European e-marketplaces will want them to be euro-centric - for the UK not to have the euro in this case will be a flop. If they don't get involved full blast, they will be left out," she said.
"Some of this may be down to resentment towards the UK for not committing to the euro, but the real reason is that if you want to create a big virtual marketplace, then you need to partner and have a number of partners. Everything that helps simplify transactions will help this partnering process," Lachal added.
"The infrastructure of a pan-European virtual marketplace is being built and the move towards the euro is accelerating that construction. Maybe it's because I'm French, but I see the euro as a vital component of a Europe-wide e-marketplace."
This was first published in January 2001